Going through business school, it seemed like Corporate Social Responsibility (CSR) was a major trend. It kept popping up everywhere and my classmates and I regularly used our knowledge of it to influence our decisions about marketing campaigns that we did for group projects.
But what exactly is CSR? Why is it so important that brands take a stand? Why is this trend coming to the forefront right now? What brands are embracing this idea? And how are said brands benefiting from CSR, in terms of sales and market share?
These are all important questions when it comes to the CSR model of running a business. So, let’s take a stab at answering them, shall we?
What is Corporate Social Responsibility (CSR)?
According to the Financial Times, Corporate Social Responsibility is, “a business approach that contributes to sustainable development by delivering economic, social and environmental benefits for all stakeholders.”
In other words, it’s a way of doing business that seeks to prioritize not just Profits, but also People and the Planet (the three Ps). And it seeks to benefit every stakeholder, which should not be confused with “shareholder.”
A shareholder is someone who owns a share of the company, otherwise known as “investors”. A stakeholder, by contrast, is anyone who has a stake in how the company operates; employees, the local community, suppliers, and so forth, as well as investors. Even the environment could be considered a stakeholder, along with the communities that are impacted by environmental issues.
Why Should Brands Take A Stand?
There are many good reasons for brands to take a stand.
It could be to support an issue that is important within their industry, like the Time’s Up movement that fights against sexual harassment in Hollywood. There’s also been recent stories of how chefs and restaurants are fighting back against what they perceive as heavy-handed crackdowns on illegal immigration.
Perhaps CSR aligns with a company’s overall mission and purpose. Starbucks is a shining example of this, with the way they support their employees (college education benefits), the communities where they source their coffee beans, and the community as a whole (their recent decision to allow nonpaying customers to linger in their stores, the opening of their first American Sign Language store in D.C.).
Maybe the company has their own foundation that they want customers to support. Two examples that spring to mind are Wendy’s and McDonald’s, which support the Dave Thomas Foundation for Adoption and the Ronald McDonald House, respectively.
Or, it could simply be because the brand wants to give back to their local communities. For example, as I’ve been applying for jobs these last couple months, I’ve noticed that one benefit that is often highlighted is time off to volunteer in the community or participate in company-sponsored volunteering events.
Regardless of why a company chooses to take a stand, one thing seems to be undeniable: Corporate Social Responsibility is good business sense.
Back in 2015, Adweek noted that, “70% [of millennials] will spend more on brands that support causes.” And with this generation having an estimated $200 billion in buying power as of 2017, the most of any living generation, they are a major force to be reckoned with in the marketplace.
So, if you are primarily targeting consumers that range in age from their twenties to mid-thirties, you should take a hard look at implementing a CSR model as part of your business strategy.
Why Is Corporate Social Responsibility Important Right Now?
Aside from the demographic issues highlighted above, it’s pretty simple: we are living in a time of unprecedented change.
From evolving political scenes across the world to a rapidly-changing physical environment, things never seem to stop moving. Seriously. It’s like my news alerts are constantly going off. Hats off to the reporters covering those stories, though.
Then there’s the changes that are being driven by new lifestyle habits of millennials and Gen-Z (ex. millennials aren’t buying homes or starting families as earlier as their parents), and technology that was only possible in sci-fi books and movies just a few decades ago. Oh, and then there’s this little invention called, “Facebook.”
Basically, today’s world is a landscape that is constantly evolving as we all try to find our footing in this new environment. And the younger generations, who are digital natives, are able to use social media to amplify their messages on issues that are important to them, where their parents had to rely on press coverage at rallies and sit-ins.
Social media has contributed to this landscape in another way: it’s now easier than ever to call a company out on their B.S.
Back in the old days (you know, before the Internet came along and brought us out of the Dark Ages), it was pretty easy to keep a potential scandal under wraps.
Before, I assume that if your company’s founder used a racist term in a phone call, you could just throw the recording away or threaten/bribe people into not going public with it. Today? Not so much.
What Brands Are Embracing CSR? How Are They Benefiting?
A number of brands are embracing the CSR model, including the ones highlighted above. As for how they’re benefiting, it generally comes in the form of increased sales and market share.
Over the next few weeks, I’ll be spotlighting some cases of brands implementing a Corporate Social Responsibility model on various scales. I’ll talk about what type of CSR they’re engaging in, some of the reasons why they might have chosen a particular issue, and how they’re benefiting from deciding to take a stand.
Do you have some brands that you want to see highlighted, or that you’d like to learn more about? Comment below and I’ll do my best to address them!